Scott proposes changes to the executive branch

MONTPELIER — Gov. Phil Scott Scott is looking to consolidate some areas of state government in a bid to create operational efficiencies and some potential cost savings, but critics say it could weaken enforcement in a key area of government.

Scott, who took office earlier this month, signed three executive orders Sunday and briefed reporters at the State House Tuesday on how they will reorganize the executive branch.

Gov. Phil Scott, right, and Agency of Commerce and Community Development Secretary Michael Schirling discuss proposed changes to the executive branch. (VPB/Neal Goswami)

One will combine the Department of Liquor and the Lottery Commission into the Department of Liquor and Lottery. Another will reconfigure the state’s Department of Information and Innovation into a new Agency of Digital Services. The third order combines the Department of Labor and the Agency of Commerce and Community Development into a single Agency of Economic Opportunity.

Scott signed the orders over the weekend to meet a Jan. 15 statutory deadline for such a reorganization. Lawmakers now have up to 90 days to reject Scott’s plans. Either the House or the Senate could pass a resolution opposing the changes, effectively preventing the reorganization from taking place.

In the press briefing Tuesday, Scott hailed the executive orders as an extension of his promise during the campaign to modernize state government and provide better service to Vermonters.

“Over the last several weeks, I, along with the team, have taken a critical look at how the executive branch is structured in order to strengthen the focus on key outcomes, like growing our work force and making state government more modern and efficient. We must realign some programs and services to do so,” Scott said.

The changes, according to Scott, are about improving customer service and operations and not focused on saving state funds. They may produce some savings but Scott said his administration had no idea how much was possible.

“For our economy to grow, employers need workers and unemployed workers need jobs. I believe this reality should be reflected in a single agency. Right now there is a disconnect between the size and skills of our workforce and the needs of Vermont businesses.”
— Gov. Phil Scott

“This is more about providing better services to Vermonters. We hope there are savings along the way, but realizing this alignment and restructuring is more about providing more efficiencies and providing better services to Vermonters. We’re not sure what the the outcome will be from a cost-savings standpoint,” he said.

The new Agency of Economic Opportunity will include the Department of Labor and is designed to bring the needs of employers and employees into alignment and to improve on job training programs so they meet existing job opportunities, Scott said.

“For our economy to grow, employers need workers and unemployed workers need jobs. I believe this reality should be reflected in a single agency. Right now there is a disconnect between the size and skills of our workforce and the needs of Vermont businesses,” he said.

Scott said he considered eliminating the Department of Tourism and Marketing but it will be retained within the Agency of Economic Opportunity. However, the department’s magazine, Vermont Life, may not continue, he said. Scott has yet to name a commissioner of tourism but plans to do so, said ACCD Secretary Michael Schirling, who will become secretary of Economic Opportunity if lawmakers sign off on the change.

“I asked to hold that position just so we could get our feet on the ground, figure out what the marketing strategy might look like, so we could hire someone who’s got the right qualities, skills and abilities to fill the needs of the state at this time,” Schirling said.

Legislative approval is not certain, however. Senate President Pro Tem Tim Ashe, D-Chittenden, said senators are concerned that placing the Department of Labor within the purview of Commerce could set up a situation with lackadaisical oversight of regulatory functions similar to how the state’s EB-5 foreign investor program was overseen before a massive $200 million alleged fraud scheme was uncovered last year.

“The one that is standing out a little bit with concerns raised is the Commerce and Labor merger and the concern that was raised is the same concern that was raised about how we managed EB-5 in the past, where you had an agency that was both promoting an activity but also the one responsible for regulating it,” Ashe said. “It could raise the same tension where you have promotional economic development activities and then you might be also enforcing the labor laws for companies that are receiving some of the benefits.”

“We don’t see that that’s an issue,” Scott said. “They’re still going to have to answer to someone. We’ll protect the rights of Vermonters and workers the same as we’ve done today.”

Creating the Agency of Digital Services will dissolve the Department of Information and Innovation. Scott said he wants to create a unified information technology structure across state government that can better address project and management challenges.

“We expect this agency to deliver improved outcomes, including an accurate view of IT spending and procurement. This will create more accountability and give the executive and legislative branches the ability to measure success of projects and services. It will allow us to prioritize and synchronize the deployment of IT policies and project management resources across all departments and agencies,” the governor said.

Meanwhile, combining the Department of Liquor and the Lottery Commission will allow for efficiencies between two entities of state government that are run in similar ways, Scott said. Additionally, licensed agents often sell both liquor and Vermont Lottery products, so combining the two could reduce redundancies in licensing and management, he said.

Scott said the reorganization, if approved, will be completed without cutting any state positions. He said he did not know how much it would cost to complete the transition, including new signs or moving state employees from one location to another.

“I’m proud we have identified a way to reorganize these areas of state government using existing resources and without putting any state employees’ jobs at risk,” he said.

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